Family Affair
Two generations of Trump launch new hotel collection.
Contributed by Jennifer Duell -- Hotels, 5/31/2008 11:00:00 PM
When Irongate principals Jason Grosfeld and Adam Fisher approached Donald Trump about partnering on a luxury hotel-condominium in the Waikiki Beach Walk project in Hawaii, the pair had already been kicked out of the land deal by the seller Outrigger Enterprises.
 The Trump Hotel Collection team (from l.): Don Trump, Jr.; Donald Trump; Ivanka Trump; Eric Trump and Jim Petrus. |
Although Irongate was one of three final bidders for the desirable land, Outrigger wanted a great name for the project and was more interested in the other two developers because they had more experience developing luxury hotels. So Irongate played its trump card (no pun intended).
“Donald called the Mayor of Honolulu and the CEO of Outrigger for weeks,” Fisher notes. Trump saved the deal, convincing Outrigger Enterprises to sell the land to the Los Angeles-based developer even though it had never done a luxury hotel project before. “Without Donald this deal wouldn’t have happened,” he contends. “It was his name and his persistence that won the deal.”
Scheduled to open in August 2009, the Trump International Hotel & Tower Waikiki will include a 350-foot (107-m) tower with about 460 luxury hotel-condominium units, ranging from roughly 500 to 3,000 square feet (46 to 279 sq. m). The 38-story building will consist of about 775,000 gross square feet (72,000 sq. m) and will include four stories of parking and 6,500 square feet (600 sq. m) of dining and retail space.
The US$525 million project is the first 5-star hotel to be developed in Honolulu in 25 years. In November 2006, all of its 464 hotel suites and residences sold out in eight hours for more than US$700 million, setting a world record for residential sales on a single day.
“Hawaii is the perfect storm for Trump,” Fisher says. “This is the best site in Waikiki. Plus, Asians—which make up a huge portion of tourists to Hawaii—love Trump.”
 Sixteen at the Trump hotel in Chicago. |
In addition to Waikiki, Irongate and Trump have partnered on the Trump Ocean Resort Baja in Mexico. Fisher says Irongate originally planned to market its Mexico project under a different brand, but jumped at the opportunity to brand the property with the Trump name.
“For better or for worse, the Trump brand is an embodiment of the man—Donald Trump,” Fisher notes. “He’s self-made, entrepreneurial and successful—his name stands for over-the-top luxury. There is not another human being on the planet who has been able to take their own last name and make the money off of it like Trump has.”
John Fox, senior vice president of PKF Consulting in New York City, agrees: “There is not a more instantly recognizable name worldwide than Trump and that name has an element of showmanship and panache that creates a branding opportunity that other luxury brands don’t have because they are perceived as more low-key.”
Next Generation Luxury
The Trump International Hotel & Tower Waikiki and the Trump Ocean Resort Baja are two of 13 hotels that make up the newly launched Trump Hotel Collection (THC). Established in October 2007, THC is a distinct division of The Trump Organization. Donald Trump is chairman and president of The Trump Organization, a privately held company that is not part of Atlantic City, New Jersey-based Trump Entertainment Resorts (TER).
Touted as the next generation of hotel luxury, THC has three hotels open and operating. The first property, the Trump International Hotel & Tower New York, opened in 1997. Trump converted the former Gulf and Western Building into a hotel-condominium project that was an integral piece of the Columbus Circle revitalization. The other two properties are the Trump International Hotel & Tower Chicago, which opened in January 2008, and the Trump International Hotel & Tower Las Vegas, which opened in March 2008.
“We are going to have a collection of hotels that is superior to any company in the world,” says Donald Trump. “We have the ability to get the best locations and the best projects because people want to be associated with the Trump brand. That is hotter than anything else.”
 The Trumps have made a deal with Nakheel to open in Dubai. |
Additional hotel projects are under development around the globe including: Trump International Hotel & Tower Ft. Lauderdale; Trump SoHo Hotel Condominium New York; Trump International Hotel & Tower Toronto; Trump Ocean Club International Hotel & Tower Panama; Trump at Cap Cana in the Dominican Republic; Trump International Hotel & Tower Palm Jumeirah in Dubai; Trump Scotland; and Trump International Hotel & Tower New Orleans.
While Donald Trump is the de facto head of THC and makes strategic decisions, his three adult children—Don Jr., Ivanka and Eric—hold vice president titles within The Trump Organization and are intimately involved in THC’s global expansion. In addition to the Trump family, Jim Petrus, a former executive Starwood Hotels & Resorts, handles operations for THC and serves as chief operating officer for Trump International Hotels Management LLC.
“The hotel business is very labor intensive, and there is only so much one person could do,” says Eric Trump. “The next generation of Trumps coming into the business—me my brother and sister—provide more manpower. The three of us have opened the doors to international expansion and helped set up the framework and foundation for future growth.”
Kid-Friendly Environment
While bickering and backstabbing typify many family-run businesses, the Trumps have somehow managed to work out a situation where they not only get along, but are also productive. “The really interesting thing is that the kids finish each other’s sentences, and they don’t disagree on much,” Fisher says, adding that all three younger Trumps are great to work with.
“I find it demeaning when people say how surprising it is that the Trump kids are so smart, down to earth and hard working,” Fisher asserts. “Donald might make the high-level decisions, but he relies on the kids to deal with the details.”
Don Jr., was the first to join his father’s company in 2001, followed by Ivanka in 2005 and Eric in 2006. Both Don Jr. and Ivanka have degrees from the University of Pennsylvania’s Wharton School of Business, while Eric graduated from Georgetown University in Washington D.C.
Eric Trump says he and his siblings each have their own talents. For example, Eric is more interested in architecture and “bones of the buildings,” while older sister Ivanka gets involved in interior design and even designed the employee uniforms. Because of the number of projects the company is working on, each of is are able to take his or her own deal and run with it, Eric says.
“Our father has raised us well and taught us well, so we all think very much alike,” Eric says. “We all have type A personalities.”
Fisher isn’t the only Trump partner who is happy to deal with many Trumps rather than just one. In fact, the Trump kids helped seal the deal for Dr. Ricardo Hazoury, partner in the Trump Cap Cana. “We are a family group, too, and when I talked with the sons and the daughter, I liked how they think as a family and how they work with the father,” says Hazoury, who is president of Cap Cana board of directors.
Trump at Cap Cana is part of a larger project. The Trump project will include a hotel, championship golf course, beach club, golf villas and lots and the bluff-top homes of Trump Farallon Estates. The entire project, which has a build out schedule of 12 to 15 years, will include: four 5-star hotels with 500 rooms, five golf courses, three of them being Jack Nicklaus Signature Courses, one of the most complete and modern marinas in the Caribbean and a total of 5,000 residential units.
Pick Of Partners
Like many other luxury hotel brands, THC is creating a portfolio that consists of owned, licensed and managed properties. Of the 13 hotels that are open or in the pipeline, THC owns one outright—the Trump International Hotel & Tower New York. Another three hotels are equity joint ventures with developers and the rest are management or licensed deals, according to Petrus.
Future opportunities will be evaluated individually, Petrus notes, although he expects the portfolio will continue to be diversified between owned, licensed and managed. THC has a team who reviews projects and partners to make sure the market, location and partners meet “Trump” standards.
“We try to educate ourselves on the areas of the world that will be important and try to meet with the Donald Trump equivalent in those markets,” says Ivanka Trump. “We are looking for the strongest partners—the ones who have a lot of experience in their own right to maximize the end result and the wherewithal to develop these projects on a day-to-day basis.”
To date, THC has been overwhelmed with interest from development partners, according to Eric Trump. “People are drawn to us,” he says. “My father is a figure who has a personality behind the brand, and so many of the brands might stand for luxury, but there is no personality behind them. With the Trump Hotel Collection, if something goes wrong, people know that my dad (and me and my sister and brother) are making sure that the quality and the operations are flawless.”
It is not just the Trump name that attracts partners either. Because THC has its roots as a developer, the company adds value during the development process, regardless of whether it is just involved in a project through licensing or management.
THC prefers to get involved in projects in the very early stages and work in a collaborative way. For example, with the Trump International Hotel & Tower Palm Jumeirah in Dubai, THC is intimately involved in site plans, architecture and interior design, says Joe Sita, CEO of Nakheel Hotels, the Dubai-based development company that is financing and developing the hotel and residential project. “We are conducting regular meetings with the Trump team, and we run by them the various designs,” he explains.
THC’s appeal isn’t surprising to industry experts. “Who doesn’t want to be associated with someone who is wealthy, has a successful track record and is known around the world,” asks Joe McInerney, president & CEO of the American Hotel & Lodging Association. “Real estate developers in any country would want to partner with Donald Trump.”
Global Name Recognition
The recognition of the Trump name means that THC has unlimited growth opportunities. “We do have global recognition, and that in itself gives us an entrée,” Petrus notes. However, the company hasn’t outlined any firm numbers in terms of expansion. “No one has said, 'In the next five years, we need to have X number of hotels,’” he says. “As a private organization, we have more discretion.”
That is not to say that THC does not have its eye on specific markets. But right now, the opportunities still seem endless. “We are one of the only brands that isn’t in every single market—most of our competitors have entered the top markets,” Ivanka Trump points out. “There are so many markets we have yet to enter that we can be strategic.”
THC is looking at markets on every continent, with several opportunities in Asia and in China specifically, as well as in Europe including Austria and Russia. Eric Trump says that THC will be inking deals in many new markets over the 12 to 18 months, although he declined to name specific markets. However, Irongate’s Fisher says his firm is discussions with THC to partner on projects in Macau and China. But, he too, declined to go into detail.
In general, THC is looking for markets that attract the top 3% to 5% of the traveling public, as well as markets that are particularly attractive to THC’s target customer—men age 35 to 55 years old with an average household income US$500,000 and an average education level is 16 years plus.
THC also has an opportunity to attract the young, affluent customer—one that has been largely ignored by other luxury brands. The new generation of Trumps understands this particular customer segment and is making sure to imbue its properties with design elements that appeal to younger demographics.
“We have combined the aesthetic of luxury that we have inherited from our father and fused that with the sensibility of our generation,” Ivanka Trump explains. “There are other hotels that are chic and trendy but lacking in service. We want to be contemporary without being trendy and provide a level of service that customers expect from ultra-luxury properties.”
Striving For Personalized Service
Beyond name recognition and luxurious accommodations, the THC team realizes that service and personalization is the real differentiator. “You can’t always build a better building, so it all boils down to the level of service and personalization—the experience you offer the guest,” says Ivanka Trump.
To that end, THC has launched its Attaché program, which is essentially a customer relationship management program that is taken to the nth degree. The company has established a team that is focused exclusively on customer preferences to ensure customer retention. For example, if a guest likes 100% down pillows, the Attaché program shares that information amongst the different THC properties so that guest will have a 100% down pillow in their room when they check in.
Petrus says the Attaché program mixes technology and human resources in a way that adds to the customer experience and provides personalized service. “People are going to try out our properties because of the Trump name, but they are going to come back again and again because of the service,” he says.
Petrus acknowledges that all luxury operators from the Ritz-Carlton to the St. Regis all highlight their personalized and “white glove” customer service, but says that THC has taken some of those companies’ best practices and tweaked them.
“The people who frequent those brands are also looking for something new, something different, and our experience will be a little more personal—a little more out of the norm,” he contends. “They’re not getting a chain-like experience when they walk into our hotels.”
|
No related content found.
